Prices of luxury residential property in Singapore were noted as being the worst performing of the 35 global cities monitored by real estate firm Knight Frank in its latest Prime Global Cities Index.
Luxury prices in the city-state fell 12.6 percent in the first quarter of 2015 compared to a year ago.
Quarter-on-quarter, prime residential prices dropped 3.7 percent in Q1 2015 from the previous three-month period.
The property cooling measures have hit Singapore’s high-end residential sector the most, revealed Knight Frank’s 2015 Wealth Report published in March.
Alice Tan, research head for Knight Frank Singapore said at the time, “This may be a good time for the UHNWIs (ultra-high-net-worth individuals) to re-look at luxury residential homes here, because we believe if the government relaxes the cooling measure for this segment of the market, the recovery could be evident.”
Meanwhile, San Francisco topped the list with the highest annual price growth of 14.3 percent. This was followed by Bengaluru (India) and Miami which saw prices grow 13.6 percent and 12.2 percent on year respectively.
Knight Frank considers prime property as the top five percent of the wider residential housing market in each city it surveys.
The average monthly gross rents of luxury/super-luxury apartment could decline by about 5 percent for the whole of 2014.
According to a recent research and forecast report by Colliers International, rents for these units have fallen 3.9 percent over the January to September period this year.
Specifically, it fell 0.5 percent quarter-on-quarter to $5.17 per sq ft per month as of Q3 2014, following the 1.4 percent quarter-on-quarter decline in Q2 2014.
“While tenants continued to enjoy stronger negotiating powers in light of the many choices available in the market, well-maintained and attractively-located homes were able to hold rents,” the report said.
The average capital value of luxury and super-luxury apartments softened by a steeper 2.1 percent quarter-on-quarter following Q2 2014’s 1.1 percent fall to $2,584 per sq ft. This is because acute affordability concerns is proving to be a formidable push factor.
For the last quarter of the year, Colliers International predicts leasing activities generally tend to slow down over the October to December year-end festive season. “With a mounting supply of high-end apartments vying for a limited pool of tenants amid an increasingly competitive leasing environment, this may exert further downward pressure on rents in Q4 2014,” the report said.